lating to the bond issued by Legal nd General Finance Plc from Londe cock Exchange. Number of Coupon Payments Eae Face Value per Bond (par value) Closing Price of bond on 12/26/2021 £ 1,000 2021 £ 138.30 2022 2

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Below is the following information
relating to the bond issued by Legal
and General Finance Plc from London
Stock Exchange.
Number of Coupon Payments Each Year
Face Value per Bond (par value)
1,000
2021
1
Closing Price of bond on 12/26/2021
£
138.30
2022
2
Coupon Rate
Frequency of Coupon Payments
Next Coupon Payment Date
Maturity Date
2023
2024
2025
2026
2027
2028
2029
2030
2031
5.875%
6 months
2
6/13/2022
12/11/2031
2
Current Date
12/26/2021
2
Days Remaining to Maturtity
Years Remaining to Maturity
Number of Cashflow per year
3637
9.96
2
2
Number of Casflows till Maturity
Value of Semi-Annual Coupons Payable f
19.93
2
29.38
Total
21
YTM
5%
Market Value of the Bond
£
755.39
1. Express the market price of the
bond along with other relevant
information that you recorded above
in terms of the relevant polynomial
equation.
2. Calculate the market value of the
bond using the above information
and assuming the yield to maturity
(YTM) of 5%.
(please do not do it in excel)
Transcribed Image Text:Below is the following information relating to the bond issued by Legal and General Finance Plc from London Stock Exchange. Number of Coupon Payments Each Year Face Value per Bond (par value) 1,000 2021 1 Closing Price of bond on 12/26/2021 £ 138.30 2022 2 Coupon Rate Frequency of Coupon Payments Next Coupon Payment Date Maturity Date 2023 2024 2025 2026 2027 2028 2029 2030 2031 5.875% 6 months 2 6/13/2022 12/11/2031 2 Current Date 12/26/2021 2 Days Remaining to Maturtity Years Remaining to Maturity Number of Cashflow per year 3637 9.96 2 2 Number of Casflows till Maturity Value of Semi-Annual Coupons Payable f 19.93 2 29.38 Total 21 YTM 5% Market Value of the Bond £ 755.39 1. Express the market price of the bond along with other relevant information that you recorded above in terms of the relevant polynomial equation. 2. Calculate the market value of the bond using the above information and assuming the yield to maturity (YTM) of 5%. (please do not do it in excel)
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